What exactly is rideshare insurance and why do rideshare drivers need it? Rideshare insurance has emerged as a necessary specialty policy for the growing number of drivers working for Uber, Lyft, and other rideshare platforms. With rideshare insurance, drivers get super important protection during the gaps that exist between personal auto insurance and the contingent coverage provided by the rideshare companies themselves. In this blog post, we will provide an overview of what rideshare insurance is, outline the reasons it has become essential for rideshare drivers, discuss policy options and costs, and share tips for obtaining proper coverage. Whether you currently drive for a rideshare service or are considering becoming a rideshare driver, understanding rideshare insurance is key. This blog will help outline everything you need to know about protecting yourself with the right supplemental rideshare insurance policy.
What is Rideshare Insurance?
Rideshare insurance is a specialty insurance policy that fills really important gaps left by personal auto insurance and rideshare company insurance when driving for Uber, Lyft, or other rideshare platforms.
When you drive for a rideshare company, you may be covered by some insurance from that company during certain periods. For example, Uber and Lyft provide insurance that would cover you if you get into an accident with a passenger in your car. However, your personal auto insurance likely will not cover you during the time you are logged into the rideshare app but haven’t yet picked up a passenger.
This period when you don’t have adequate coverage from either your personal auto insurer or the rideshare company is known as Period 1. Rideshare insurance provides protection during Period 1. It also fills gaps in coverage that could exist in other periods when relying solely on your personal insurance or rideshare company coverage.
So in essence, rideshare insurance closes potential insurance coverage gaps by combining aspects of commercial and personal policies. This specialty policy gives rideshare drivers peace of mind that they will be protected whenever using their vehicle to provide rideshare services. It bridges the insurance gap and allows you to legally drive for Uber, Lyft, or similar services.
How Does Rideshare Insurance Work?
Rideshare insurance provides coverage during the periods when drivers may not be fully protected by their personal auto policy or the rideshare company’s commercial policy. It bridges these coverage gaps across the three periods of the rideshare process:
Period 1 – Online and Waiting for a Match
Once you turn on your rideshare app, your personal insurance typically no longer applies, but you are not yet covered by the rideshare company either. This creates a gap. Rideshare insurance fills this gap by providing primary accident and medical coverage while you wait for a ride match.
Period 2 – Passenger Pick-Up and Trip
When driving to pick up a passenger and with a passenger in your car, the rideshare company’s commercial insurance is primary. However, it may have lower limits or not cover certain situations. This is when rideshare insurance acts as supplemental insurance to provide additional protections as needed beyond what the rideshare insurance offers.
Period 3 – Offline, No Passenger
When you have dropped off a passenger and turned off your rideshare app, your personal auto policy resumes full effect, so rideshare coverage is no longer needed during your personal driving.
A major benefit of rideshare policies is that they carry much higher liability limits than most personal auto policies. This better protects you in case a significant claim ever exceeds your base policy’s caps.
Rideshare endorsement can be added to a personal policy for a relatively small increase in premium. While not mandatory, rideshare insurance provides important protection and peace of mind for just pennies more per day.
Do you need rideshare insurance?
For most rideshare drivers, the answer is yes – having a rideshare insurance policy is highly recommended to protect yourself while driving for companies like Uber or Lyft.
There are a few key reasons why rideshare insurance is so important:
- Coverage gaps: Your personal auto insurance likely does not cover you while commercially rideshare driving. And while Uber/Lyft provide some insurance, it primarily applies only when transporting passengers. Rideshare insurance fills this gap to cover you during the super important waiting period between rides.
- Insufficient limits: Rideshare company insurance tends to have lower liability limits compared to a personal policy. Rideshare policies usually match your personal auto policy’s higher limits – making sure you have ample coverage in the case of an major accident.
- Peace of mind: Knowing you have comprehensive rideshare coverage and won’t be financially devastated by an accident that occurs during any point of the rideshare process is super important reassurance.
In essence, rideshare insurance protects against the coverage gaps, lower limits, and uncertainty around relying solely on your personal or Uber/Lyft’s insurance programs. The relatively small additional cost is worth it for most rideshare drivers for this added peace of mind.
However, rideshare insurance may be considered optional in some specific cases, like if you only drive occasionally or have commercial coverage through an employer. But for regular rideshare drivers, getting a rideshare policy that complements platforms’ insurance is highly advisable. Check with a trusted insurance agent to understand your coverage requirements and options.
Wondering how you can get roadside help if uninsured? Click here to read our article “How Much Is Roadside Assistance Without Insurance?” for useful advice to keep you covered when stranded.
What Does Rideshare Insurance Cover?
A rideshare insurance policy provides additional protections tailored to the unique risks faced by rideshare drivers. By combining aspects of personal and commercial auto policies, a rideshare policy can include:
- Liability coverage for bodily injury and property damage at levels that typically match your personal policy limits. This ensures sufficient coverage in case an accident you cause results in high damages or injuries.
- Contingent comprehensive and collision which provides first-dollar coverage for damage to your own vehicle during Period 1 and Period 2 operations. This includes situations when online but not yet matched to a passenger as well as when transporting a passenger.
- Uninsured/underinsured motorist bodily injury and property damage coverage to protect you if an at-fault driver either does not have insurance or has low policy limits.
- Medical payments or personal injury protection to cover medical costs for injuries suffered by yourself or your passengers, regardless of fault.
- Potential other coverages like gap insurance, rideshare equipment coverage, and loss of income reimbursement during the claims process.
Keep in mind that rideshare policies have some variability in their exact protections and limitations based on your state and insurance provider. Carefully reviewing the fine print of any quote is key. But overall, rideshare insurance aims to provide supplemental coverage during the rideshare gaps left by personal and rideshare company policies. For most drivers, the added protection is well worth the minimal extra monthly premium cost.
How Much Does Rideshare Insurance Cost?
The cost for rideshare insurance will depend on several factors, but typically ranges from an additional $10 – $20 added to your monthly auto insurance premium. For most drivers, this works out to less than $5 extra per week – making the added protection well worth the small incremental cost.
Some key factors that influence the pricing are:
- Your location and insurance provider
- Your driving and claims history
- Levels of liability, deductibles and other coverage limits selected
- Your age, type of vehicle insured and other standard rating factors
To get a personalized rideshare insurance quote based on your situation, we recommend reaching out to insurance agents that specialize in rideshare and communicating apps. They can outline coverage options from multiple highly-rated insurers licensed in your state. This allows you to compare plans across providers to find the optimal rideshare policy at a great price.
The small monthly price increase for rideshare insurance buys valuable peace of mind by filling gaps that may exist when relying solely on a personal auto or rideshare company policy. For rideshare drivers, rideshare insurance joins tires and gas as a necessary operating cost providing safety and financial protection every mile on the road.
Getting appropriate rideshare insurance is an important consideration for all transportation network company drivers. This Carl Mixon blog has outlined what rideshare coverage is, how it works, why it’s recommended, and what it covers. Visit carlmixon.com to read more of our expert insurance advice articles so you can make smart choices and have full confidence every mile behind the wheel.
